The transition to a 100 percent renewable U.S. power grid would need investment of up to $4.5 trillion over the next 10 to 20 years.

The transition to a 100 percent renewable U.S. power grid would need investment of up to $4.5 trillion over the next 10 to 20 years.

The transition to a 100 percent renewable U.S. power grid would need investment of up to $4.5 trillion over the next 10 to 20 years.

That’s according to new analysis from Wood Mackenzie (WoodMac), which estimates that about 1,600 gigawatts (GW) of new wind and solar capacity would be needed to produce enough energy to replace all fossil fuel generation in the country.

About 900 GW of new storage would also be needed to ensure wind and solar generated power is available exactly when consumers need it, WoodMac pointed out. Allowing 20 percent of the power mix to come from existing natural gas-fired generation would reduce renewable energy costs by roughly 20 percent and energy storage costs by at least 60 percent, WoodMac found.

“The mass deployment of wind and solar generation will require substantial investments in utility-scale storage to ensure grid resilience is maintained,” Dan Shreve, head of global wind energy research, said in a company statement.

"The challenges of achieving 100 percent renewable energy go far beyond the capital costs of new generating assets. Most notably, it will need a substantial redesign of electricity markets, migrating away from traditional energy-only constructs and more towards a capacity market,” he added.

In a live blog following the United States’ presidential primary debate on Thursday, the American Petroleum Institute (API) said promises of an imminent energy landscape powered entirely by alternative fuels “might make for an applause line but it’s less likely to make for plausible policy”.

“Instead of throwing the baby out with the bath water, America’s policy leaders should pursue energy policies that value the resilience of a diverse energy portfolio,” the API stated in the blog.

 

Study: Weaning U.S. power sector off fossil fuels could cost $4.5t

by Andrea Zander

The transition to a 100 percent renewable U.S. power grid will need investment of up to $4.5 trillion over the next 10 to 20 years, according to new analysis from Wood Mackenzie.

Wood Mackenzie estimates that about 1,600 gigawatts (GW) of new wind and solar capacity would be needed to produce enough energy to replace all fossil fuel generation in the United States.

“The challenges of achieving 100 percent renewable energy go far beyond the capital costs of new generating assets. Most notably, it will need a substantial redesign of electricity markets, migrating away from traditional energy-only constructs and more towards a capacity market,” said Dan Shreve, head of global wind energy research.

 

 

 

The world has 12 years to limit greenhouse gas emissions or face severe impacts from global warming.

So proclaimed the Intergovernmental Panel on Climate Change in its updated report on climate change in October 2018, setting off alarm bells around the world. A growing list of countries, states, local communities and global businesses has heeded the call to action and adopted more aggressive measures to limit their carbon footprints.

The sense of urgency is palpable, including in the United States, where climate change is emerging as a central issue amongst Democratic presidential contenders. Primary frontrunners are proposing multi-trillion-dollar investments in support of their “Green New Deal” initiatives.

We estimate the cost of full decarbonisation of the US power grid at US$4.5 trillion, given the current state of technology.

 

Evolve or perish

Elsewhere, in one of her final acts as Prime Minster, Theresa May has brought forward legislation to upgrade the UK’s existing 2050 emissions reduction target from 80% to 100%.

We estimate the cost of full decarbonisation of the US power grid at US$4.5 trillion, given the current state of technology. That's nearly as much as what the country has spent, since 2001, on the war on terror. From a budgetary perspective, the cost is staggering at US$35,000 per household – nearly US$2,000 per year if assuming a 20-year plan.

The price tag may not be the highest hurdle to overcome. Eliminating fossil fuels represents a transformative investment opportunity for stakeholders of the new energy economy. But for legacy participants in the energy industry, it also creates an existential crisis. Companies – and in some cases, whole industries – must evolve or perish.

Although decarbonisation timelines differ, it is increasingly clear that utilities, the oil and gas industry and other energy market participants must account for the implications of these impending policy decisions in their current strategic planning activities.

Consequently, difficult choices must be made by political leaders, regulators, CEOs and energy consumers alike. For any country to embrace a nationwide transition to 100% renewable energy (RE100) or zero carbon (ZC100) emissions constitutes a massive disruption with far-flung economic and social repercussions. Nimbyism – a not-in-my-back-yard attitude – is inevitable and forecasted increases in
consumer energy costs may result in public backlash against aggressive climate change policies.

Transitions costs vs levelised costs of renewables
 

RE100 goals remain largely aspirational, but attainable.

 

The world is facing an unprecedented challenge

The scale of the challenge is unprecedented, requiring an upending of fossil fuel industries and a complete redesign of the power sector. Recent growth in renewable electricity is a clear example of change already delivered.

Full decarbonisation of power must be regarded as a prerequisite of any meaningful progress towards deep decarbonisation of the overall energy system. The requirements to be placed on the global renewable energy supply chain are also noteworthy, and include substantial R&D spend to address shortcomings in energy storage and distribution technology.

We conclude that RE100 goals remain largely aspirational, but attainable given a reasonable time horizon to allow for technology development, regulatory realignment and socio-economic reforms. Further, adoption of ZC100 or even ZC80 goals increases the likelihood of success, incentivising the development of next-generation nuclear and carbon-capture technologies.

 

https://www.woodmac.com/news/feature/deep-decarbonisation-the-multi-trillion-dollar-question/

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Dividing $4.5 Trillion by 10 years is $450 billion per year. The US spends about that much per year on energy infrastructure and production as it is. Why is this 'news'? Exxon's annual profits have been $450 billion in some years.

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6 hours ago, Meredith Poor said:

Dividing $4.5 Trillion by 10 years is $450 billion per year. The US spends about that much per year on energy infrastructure and production as it is. Why is this 'news'? Exxon's annual profits have been $450 billion in some years.

Maybe they mean $4.5 Trillion above baseline infrastructure spending.  If so, that would be significant.

Also, it's not going to happen.  The politicians and financiers had their fun (read: made tons of money) scaring people with climate alarmism, but I suspect the public is losing their appetite for it. 

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26 minutes ago, BenFranklin'sSpectacles said:

Maybe they mean $4.5 Trillion above baseline infrastructure spending.  If so, that would be significant.

Also, it's not going to happen.  The politicians and financiers had their fun (read: made tons of money) scaring people with climate alarmism, but I suspect the public is losing their appetite for it. 

Show me the specific chart or paragraph that says or illustrates 'above baseline'.

I would like to see anybody make an accurate prediction of energy capital and operating costs over the next ten to twenty years. Most economists can't reach a consensus, or even an average that is within range, that reflects what markets do in the next month or quarter. Most predictions of RE penetration over the last 20 years have been grossly pessimistic.

There are about 130 million households in the US, and the average power bill is probably around $100 per month. So existing expenditure is around $13 billion a month or $156 billion per year, just for residential electricity. This doesn't include any government jurisdictions, industry, commercial, etc. It's really easy to condense a bunch of numbers together and come up with something that looks enormous. Divide it down, however, and it looks like business as usual.

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9 hours ago, Meredith Poor said:

 I would like to see anybody make an accurate prediction of energy capital and operating costs over the next ten to twenty years. Most economists can't reach a consensus, or even an average that is within range, that reflects what markets do in the next month or quarter.

We can agree on that much. 

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On 6/29/2019 at 4:34 AM, Meredith Poor said:

Dividing $4.5 Trillion by 10 years is $450 billion per year. The US spends about that much per year on energy infrastructure and production as it is. Why is this 'news'? Exxon's annual profits have been $450 billion in some years.

450 billion is absurd, check again. Their revenue before expense has never even been that high. 

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20 hours ago, KeyboardWarrior said:

450 billion is absurd, check again. Their revenue before expense has never even been that high. 

I stand corrected. I'm seeing net profits in the area of $16 billion per year.

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Transition to renewables will put the USA in Chains no more baseball and Apple pie.

If America gives up its role as the global leader in oil and gas production, hostile foreign governments will gladly take our place and weaponize their energy resources. The bill would transport us back to the 1970s, when the Arab oil embargo brought the U.S. economy to a standstill and caused gas lines and fuel rationing. America produces more than 11 million barrels of oil a day. Removing that supply from global markets would give Putin and his ilk a stranglehold on the entire world economy.

Perhaps plan supporter Sen. Bernie Sanders likes the idea of American workers wasting their time in a socialist line for basic products like fuel and bread. Not steaks though, as the plan's proponents also call for the end of cattle in the United States.

Green New Deal: Just Hot Air

Progressive activists dismiss such concerns, arguing that America will generate almost all its energy from renewable sources and thus be immune to oil market fluctuations. But that's fantasy. Leading researchers doubt it's possible to transition to renewable sources within three decades — much less the 10 years called for in the Green New Deal.

In addition to hurting U.S. consumers, the Green New Deal would undermine the security of America's closest allies. Consider that the European Union gets more of its oil and gas from Russia than from any other country — an arrangement that stymies Europe's ability to check Russian power.

Should Russia seek to expand its influence and control in the region, as it did when it annexed Crimea in 2014, Europe will be forced to choose between standing up for its values and protecting its energy imports. That's a precarious position. Supporters of this plan have been screaming from the rooftops about Russian influence in the 2016 election, but seem eager to hand over power to Russia in exchange for some vague promises of new things that haven't yet been invented.

A Gift To Putin

The United States is Europe's best hope of breaking its dependence on Russian energy. American firms have been ramping up their sales of liquefied natural gas to the continent. In October 2018, the United States traded more LNG with the EU than any month on record.

The Green New Deal would make such trade impossible. Our rapid exit from the oil and gas sector would be a gift to the Putin regime.

The Green New Deal would be a geopolitical disaster for America. Lawmakers shouldn't give it the time of day.

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